From the monthly archives: October 2010

We are pleased to present below all posts archived in 'October 2010'. If you still can't find what you are looking for, try using the search box.

Growth Potential is a Factor When Selling a Business

Potential buyers who read about a business for sale are interested in knowing how it can be grown once they bought it. The growth potential of a business plays a major role in its value. While buyers will purchase a business at a price predicated on current and historical cash flows, their main motivation is the opportunity to grow the business beyond its current size. Therefore, in order to get a premium price on the sale of a business, the seller should outline a tactical growth plan that would delineate open opportunities that can be tackled and exploited by a buyer to increase sales and profit. It is important that existing growth opportunities be realistic and clearly communicated in writing.

This document would serve as a template for discussion during initial buyer meetings. It would cohesively paint the larger picture of your business and translate into added value.

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Tip #26: Business Owner Burnout. Overcome or Sell!

Many business owners have operated their companies for too long and have lost their interest or drive. As a result, the business may flounder or stop growing. Not only will revenues and profits suffer, the value of the company will as well. And it only gets worse in a down economy. When a business owner hits burnout, he or she must overcome or take steps to sell the company. Click here for "Inc. Magazine Article - Overcoming Burnout."

Should You Purchase or Lease the Property When You Buy a Business

Many buyers looking for acquisitions today in the small business marketplace struggle with the decision whether to buy or lease the real estate for their business operations. With real estate values having been softened by the economy, now may be the best time to evaluate the pros and cons of small business real estate ownership. Following are some of the major considerations in making that decision. PROS: An owner can accumulate equity with long term real estate ownership through paying down the mortgage and experiencing market appreciation in the value. As landlord, you don't have someone else dictate rent increases or uses of the property. The property owner can lock in a fixed overhead cost for their facility. Excess space can be used as the business grows or may be used to produce incremental income from rents. There may be significant income tax savings from depreciation. Financing options are more numerous for real estate than for other capital assets. The buyer ...

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Tip #21 - The Lease Can Make or Break the Sale of a Business

The lease terms of the business space can be a major consideration for a buyer. For example, a distribution company with a long-term lease on a good location can be attractive. But a long-term lease on a business needing more space to grow could be a detriment. Or, there can be concerns about an expiring lease when the landlord might demand a large increase. When it comes time to negotiate a new lease, business owners must carefully think through the timing of their plans for exiting their business.

Other Aspects of Your Lease that Should be Reviewed Before Selling.